8/6/2019 4719-10

1/36

"Our challenges in life presentour biggest opportunities for growth."-Joan Gustafson

22nd A n n u a l R e p o r t 2009-10

MOD,I /GRANIT ILESJAro granite industries ltd

(100% Export Oriented Unit)An ISO9001:2008 Company

8/6/2019 4719-10

2/36

PATHFINDERBoard of DirectorsMd's MessageKe y IndicatorsFinancial HighlightsNoticeBoard of Directors' ReportManagement Discussion & AnalysisCorporate Governance ReportAuditors' Certificate on Corporate GovernanceAuditors' ReportBalance SheetProfit & Loss AccountCash FlowSchedulesSignificant Accounting PoliciesAnnexure -I

8/6/2019 4719-10

3/36

BOARD OF DIRECTORSSuni l K Ar o r aManaging Director

Kastur i Lal Aro raDirectorDinesh Chand ra KothariDirector

Rahul GuptaDirectorSunda reshwara G. SastryDirector

(Resigned w.e.f. 26.04.2010)Pradeep Kumar JainDirector(Appointed as an Additional Director

w.e.f. 24.04.2010)Sujata Aro ra

DirectorCompany SecretarySabyasachi PanigrahiAuditorsAlok Mittal & AssociatesBankersBank of BarodaHSBC LimitedICICI Bank LimitedRegistered OfficeS -1 6 , Second F loor , Green Park Extension,New Delhi 110016, IndiaPhone: 91-11-26511021, Fax: 91-11-26511022Unit!103, Sipcot Indust r ia l Comp lex , Hosur , 635126Tamil Nadu, IndiaCorp. Off. & W ork sKoner ipal l i Village, Via: Shoolagir i , Taluk: Hosur,Dist. Krishnagi r i , Tami l Nadu 635117, IndiaTel: 91-4344252384/952/100 Fax: 91-4344252217Registrar & Share Transfer AgentM/s Alanki t Assignments LtdAlankit H ou se , 2 E / 2 1 , Jhandewa l an Extens ion ,New Delh i 110055, IndiaTel: 91-11-23541234, 42541234 Fax: 91-11-23352001Scrip CodesBom bay Stock Exchange L im i ted : 51372 9National Stock Exchange o f India Limited: A R O G R A N I T E / E QISIN No. : INE2IOCOIOI3

Aro g ran i te i ndust r ies ltd.

From th e desk of the Managing DirectorIt gives m e i m m ense p leasure to we lcome you to the 2 2 n dA n n u a l Genera l Meeting of you r Company.The last quarter of 2009-10 showed signs of the wor ldeconomy stabil izing from th e clutches of unprecedentedan d unimaginary recession. Building activities and generaleconom ic activities have begun to pick up. New house buildingan d renovation wo rk is likely to be price sensitive and we mustlook to more newcountries for growth opportunities.W e, being a 100% Expor t Oriented Unit fo r Grani te Tilesan d Slabs, had a t ough t ime as we were d i rect ly hit by theglobal recession as we a re e xp os e d to international market .Since we a re di rect ly l inked to the hous ing sector, wh ichwas worst h i t by the recession, we had a tough t ime .H o w e v e r instead o f being daunted by the s i tua t ion , y o u rCompany 's leadership resolved to turn these challengesinto opportunities by cutting costs and maintaining bettereff ic iency fo r second year in a row.Despi te a ll o d d s , th e stone i ndus t ry has susta ined a growthpattern although with smal ler growth rates. W e have beenable to achieve a t u rnove r of Rs. 131 . 99 Crores which is1 3% m o r e than last year ' s t u r nove r and a p re - tax profit o fRs. 13.85 Crores which is marginal ly less than last yea r ' spre- tax profit as a result of t remendous pressure on themarg ins . This has been a resu l t of the company em p loy inga de fens ive strategy. Sell ing is the easy part; th e tough partis to collect payments. 2 0 0 9 - 1 0 saw a sh i ft toward s shorterc red i t period and advanced paym en t s .Our strategy for the prev ious year was a simple one -"Down to Basics" . The company focussed on ca te r ing toth e needs of the cu s t om ers by process ing divers i f ied stone.Hence we a re focus ing on i ncreas ing th e range o f c o lou r s byimporting exot ic colours from var ious count r ies t o f u r t he renhance the marke t share in the international market .For th e coming year, we are going to take a more aggressivestrategy by selling hard but at the same time maintainingl ower costs in an effort to increase the profit margin. We arealso trying to venture into new and upcoming markets l ikeSouth America, Middle East,.South Africa, East Europe andRussia. We at AGIL, cont inued to grow and perform betterto achieve awards an d accolades. Th e Company has receivedSpecial Export Award for the ninth year f rom CAPEXIL.Together we can look back in p r ide an d march ahead wi thconf idence for the bet terment of the stakeholders of theCompany and growth o f their overa l l wealth. W e solicity o u r sincere, ded i ca ted and con t i n ued suppor t t o make2010-11 a re f reshing year fo r all.As always, I con t inue to seek y o u r good wishes a n d s u p p o r tfor our vision and goal.Sun i l K. A r o r aNew Delhi, 24.04.2010

8/6/2019 4719-10

4/36

Aro gran i te i ndust r ies ltd.

2004-05 2005-06 2006-07 2007-08 2008-09 2000-10

EBIDAT( R s . in lacsl

Book Value per share(In Rs.)

40-

2 0 -

KEY INDICATORSDESCRIPT IONDIVIDEND (%)DIV IDEND PAYOUT RAT IO (%)E P S (Rs.)B O O K VALUE PE R S H AR E (Rs.)R O C E ( % )RONW(%)

2002-0315

9.0516.5765.1823.4629.74

2003-0415

8.0618.6282.482 2 . 0 225.76

2004-0515

9.1416.4069.2420.8526.68

2005-0615

13.2711.3178.8213.1315.24

2006-0720

9.232 1 . 6 698.1516.4021.81

2007-0815

13.1611.40

108.1710.6510.54

2008-0910

9.2510.8182 .1513.3013.16

2009-1010

9.7410.2793.9912 .0210.93

8/6/2019 4719-10

5/36

Aro grani te indus t r ies ltd.

FINANCIAL HIGHLIGHTS < R S . m L a c s )DESCRIPTIONSALESEBIDTADEPRECIATIONTA XPROFIT AFTER TA XG R O S S BLOCKNE T WORTHRESERVE & SURPLUSEQUITY S H AR E CAPI TAL

2002-035 3 2 1 . 0 21261.67180.66

71.43775.26

3196.993 0 5 0 . 2 62594.06468.00

2003-046048.421 3 2 3 . 2 6174.5171.08

871.193286.473859.953386 .05468.00

2004-057358.171667.31181.91

4 2 . 7 71151.624766.404860.654184.60

702.00

2005-067784.621287.27233.51

42.55793.72

4783.025533.444858.25

702.00

2006-0710403.022029.08235.92

45.691520.644837.106889.826214.84

702.00

2007-0810141.661869.66314.82135.21800.19

9371.567593 .636891.63

702.00

2008-0911610.982540.12427.99160.78

1198.289424.539105.047996.691108.35

2009-101 3 1 1 3 . 3 0

2282.20430.48235 .30

1063.979 5 1 3 . 1 49737.668701.591036.07

Profit After Ta x(Rs. in lacs)

I 5 2 n . r > 4

1991: Sta r ted com merc ia l production inUnit 1 (Tiles) with a t u r n o v e r o fRs .61 .17 lakhs (1990-91)

1995: The Company went Public ande x p a n d e d Unit 1 (Turnover :Rs.654.000 lakh s in 1995-96)

1996-99: Received Cert i f icates of Merit fromCAPEXIL fo r 3 consecut ive years

1998: Ac h ie ve d Cert i f icat ion to ISO 9002Quality Management Systems.

1999-2009: Received CAPEXIL 'Spec ia l E xpo r tA w a r d s ' 1999-00, 2001-02,2002-03, 2003-04, 2004-05,2005-06, 2006-07, 2007-08 &2008-09

2001: Exp a n de d faci l i t ies forprocess ing Slabs with 3 GangSaws. Construction, Erection& Commiss ion ing o f Plant &Machinery com p l e t ed in r eco r d t imeof 6 months. (Turnover : Rs.2971.00lakhs in 2 0 0 1 - 0 2 )

2 0 0 2 : Unit 1 upg raded to ISO9001:2000Quality Management Systems.Unit I I cer t i f ied for ISO 9001:2000Quality Managemen t Systems byRWTUV, Germany within 11/2years from starting Com m erc i a lP rodu c t i on . Recognised as anE X P OR T H O U S E

2003: A d d e d 4t h Gangsaw2004: A d d e d 5th & 6th Gangsaw2005: Initiated implimentation of ISO

14000 f2006: Initiated Expansion. Doubled

Tiling Capaci ty & a d d e d 7th & 8thGangsaw.

2 0 0 7 : Crossed t u r nove r of Rs. 1 Bil l ion.Listed on National Stock Exchangeof India Limited. Received Cert i f icateof apprec ia t ion fo r best e x p o r tpe r f o rm ance amongs t 100% EOUsfrom Madras Exp or t Processing Zone(MEPZ) for 2005-06.

2009: A w a r d e d Star Expor t House Status.

8/6/2019 4719-10

6/36

A ro granite i ndus t r ies ltd.

REPUTATIONTHATRESONATESACROSSSEAS

A R O ' s strong marke t i ng network and steadfast dea l ingshas st rengthened i ts bonds with its cus tomers an dhelped in penetrating each an d every corner of its targetsphere. I ts u nswe rv i ng ded icat ion to quality and excel lentper formance has crystal l ized its relat ionship with buyers inEurop e , Aust ra l ia , North and S ou t h Amer ica , South Af r icaand New Zealand.ARO is cons is tent ly working towa rd s i r rep roachab le honestyin business and i s reach ing new horizons in escalating thesebonds to achieve higher levels o f cu s t om er sat isfact ion.

jb tariada ,*; /

Hawaii

S o u t hAmerica

-UK / **, , . NBtbfirlMMiIreland *J Po|anijBelgium S p a i nf

L i b y a

SouthA f r i c a

J a p a n

A R OFacilityHosur

Australia-

Z e a l a n d

8/6/2019 4719-10

7/36

Aro granite indus t r ies ltd.

NoticeNOTICE is hereby given that the 22nd Annual General Meeting of the members of ARO GRANITE INDUSTRIES LIMITED will be heldon Thursday, th e 2 9 th July 2010 at 10.30 A.M. at Lakshmipat Singhania Auditorium, PHD Chamber of Com m erce an d Indust ry, PHDHouse, 4/2, Siri Institutional Area , August Kranti Marg, New Delhi 110016 to transact the following business:ORDINARY BUSINESS1 . To receive, cons i d e r and adopt th e Aud i t e d Ac c oun ts for the financial year ended 31 st March 2010 and the Reports of the

Direc tors and Au d i t o rs t he reon .2 . To dec la re d i v i d e n d .3. To appoint a Di recto r in place of Shri Kastur i Lal Arora , who retires by rotation an d being eligible, offers himself for re-appointment.4. To appoin t a Direc tor in place of Smt. Suja ta Aro ra , w ho ret i res by rotation and being eligible, offers herself fo r re -appoin tment .5. To cons ide r and i f thought fit to pass, with or without modi f icat ions, the following as Ordinary Resolution:

"RESOLVED that p u r s u a n t to the provis ions of Section 224 of the Companies Act 1956, M/s Alok Mittal & Associates, CharteredAc c oun ta n ts , New Delh i be and are hereby appointed as Aud i t o r s of the Company from the conclusion of the 2 2 n d Annua lGeneral Meeting upto the conclusion of the next Annual General Meeting on a remuneration to be fixed by the of Board ofDirec tors of the Company. "

AS SPECIAL BUSINESS6. To consider and i f thought fit to pass, with or without modif icat ions, th e following as Ordinary Resolution:

RESOLVED THAT Shr i Pradeep Kumar Jain, wh os e appointment on the Board as an Additional Director de te rmines on the dateof the present Annual General Meeting be and is hereby appointed as a Director liable to retire by rotation.

7. To consider and i f thought fit, to pass with or without modif icat ion(s), th e following reso lu t ion as Special Resolution:"RESOLVED THAT pursuant to the provis ions of Section 314(1B) and other appl icable prov is ions , i f any, of the Compan ies Act1956 or any s ta tu to ry modi f i ca t ion or re -enac t m en t thereof , consent o f the Company be and i s hereby accorded to Ms. ShivaniAro ra , a relat ive of Shr i Kastu r i Lal Aro ra, Smt . Suja ta Aro ra , Directors and Shr i Sun i l K. Aro ra , Managing Director of theCompany, to hold an of f ice o r place o f profit as Corporate Head- Marketing of the Company for a per iod o f 5 years with effectf rom the da te of app rova l by the me mb e rs i n the ensu ing Annu a l Genera l Meeting of the Company on a monthly rem u ne ra t i onnot e xc e e d in g Rs.50,000/- with such increments as may be d ec ided by the Board , p rov i ded that th e total monthly remunerat ionpayable to Ms. Sh ivan i A r o r a d o e s no t exceed R s. 50,000/-RESOLVED FURTHER THAT Shr i Sunil K. Aro ra , Managing Director, Shr i Kastur i Lal Aro ra , Director an d Shr i Sabyasachi Panigrahi,Com pany Secre ta ry of the Company be and a re hereby author ized several ly to sign, file al l forms, do cum ents , papers e tc. withth e Registrar o f Com pan i es /Mi n i s t ry o f Corporate Affa i rs and to do a l l such acts, d e e d s and things to give ef fec t to the abovereso lu t ion. "

8. To cons ide r and i f thought fit, to pass with or without modi f icat ion(s), the following reso lu t ion as Special Resolution:" R E S OLV E D THAT pursuant to sub-sect ions (4) & (7) of Sect ion 309 o f the Compan ies Act 1956, approval o f the Members o fthe Company be and is hereby accorded and it shall always be deemed to have been accorded to the payment of commissionno t exceed ing 1% of the annual net prof i t of the Company, computed in the manner refer red to in sub-sect ion (1 ) o f Section198 of the Compan ies Act 1956 read with Sect ion 349 & 350 and other appl icable provis ions of the Compan ies Act 1956 onmonthly/quarterly/half-yearly/annual basis as may be dec ided by the Board of Di rectors of the Company for a per iod of fivef inancial years c o m m e n c i n g 01.04.2009 to the Direc tors other than th e Managing Direc tor (s ) and.Wholetime Director(s) of theCompany who may in thei r absolu te d isc re t ion accept a l ower amount in any year or y e a r s " .RESOLVED FURTHER THAT Shri Suni l K. Arora, Managing Director, Shri Kasturi La l Arora, Director and Shr i Sabyasachi Panigrahi,Company Secretary of the Company be and a re hereby author ized several ly to sign, file al l fo rms, documen ts , papers etc. withth e Registrar o f Compan ies /Min is t ry of Corporate Affa i rs and to do a l l such acts, d e e d s and things to give ef fect to the abovereso l u t i on . "

Fo r & on behalf of the BoardRegd. Off ice:S-16, Second FloorGreen Park ExtensionNew Delhi 110016 (Sun i l K A ro ra )Date: 24th Apr i l , 2010 Managing Director

8/6/2019 4719-10

8/36

8/6/2019 4719-10

9/36

A ro grani te indust r ies ltd.

FOR THE ATTENTION OF THE S HARE HO LDE RS1 . Members/Prox ies s h ou ld bring the At tendance Slip sent herewith duly filled in for attending the Annual Genera l Meeting.2 . Please check the p in c o d e in the a dd r e s s slip pr inted on the envelop and adv ise cor rect ion, if any therein. Also please d o indicate

the Pin Code N u m b e r o f y o u r de l ive ry pos t off ice whi le notifying change in you r ad d r ess to the Company.3. Requests fo r t r ans fe r o f Shares an d related c o r re s p on de n c e shou ld be ad d r essed to the Com pany ' s Registrar & Share Transfer

A gen t M/s Alank i t Assignments Limited, Alank i t House, 2E/21, Jhandewalan Extension, N e w Delhi 110055. Theshareholde r m ay a p p roa c h the i r Depos i tory Part icipant fo r getting thei r shares demater ia l i sed and in respect of the sharesa l ready held in demate r ia l ised mode fo r reg is t ra t ion o f change in their add resses, bank mandates and nominat ions etc. In caseof any d i f f i c u l t y , please wr i t e to the Company Secretary at S-16, Second Floor, Green Park Extension, N ew Delhi 110016or E mail: investorgrievance@arotile.com. Please quote your folio no/DP ID/Client ID or numbe rs of shares for promptattention.

4. To avoid fraudulent encashment of Dividend Warrant, Members are requested to advise the details of their Bank Account i.eName and a d d r e s s of the Bank, A c c o u n t No and Name of the Account Holde r (s ) fo r printing on the Div idend Warrants .

5. Purs ua n t to Sect ion 205C of the Compan ies Act 1956, th e amount o f dividend which remain unclaimed/unpaid for a pe r iod of7 years is r equ i r ed to be t rans fe r red by the Company to the Investors Edu cat ion and Pro tect ion Fund (IE&PF) const i tuted by theCentral Gove rnmen t . Accordingly unclaimed/unpaid dividend for the year ended 31.03.2003 will be transferred to IE&PF. It maybe no t ed that no cla im shal l l ie against IE&PF or the Company af ter t ransfer of the said unc la imed / unpa i d d iv i dend to the IE&PF.Th e re fo re , those Shareho lders w ho have not yet encashed th e said d i v i dend war ran t s m ay wr i t e to the Com pany fo r reva l i dat ion/issue o f dup l i c a te d i v i dend wa r ran t s quoting thei r folio no/DP ID/Client ID .

6. The Company had star ted the buyback of fully paid Equity Shares of the Company on June 29, 2009 in accordance with theBoard Resolu t ion da t ed 08.06.2010. Th e b uyb a c k process will be completed June 0 7, 2010. As on 31.03.2010, a total nu m berof 7 ,22 ,779 Equi ty Shares have been bought back and e x t in g u is h e d .

7. Copies of A n n u a l Repor ts will not be d is t r ibu ted a t the Meeting. Membe rs are therefo re reques ted to bring thei r copies to them ee t i ng .

8/6/2019 4719-10

10/36

Aro granite i ndust r ies ltd.

Directors' ReportWe a re delighted to present ou r 2 2 nd Annua l Repor t together with Audited Statements o f Accounts of the Com pany for the year endedon 31 st March 2010.FINANCIAL RESULTS

(Rs. in lacs)31.03.2010 3 1 . 0 3 . 2 0 0 9

Gross Prof i t before Depreciation 1815.11 1847.13Depreciation 430.48 427.99Ne t Prof i t befo re Tax 1384.63 1419.14Provis ion for Tax - Cur ren t 236.25 161.58

- Defer red 83.69 47.27- Others 0.73 11.99

Su rp l us available for appropriation 1063.97 1198.28Dividend (including Dividend Tax) 121.22 129.67Amount t ransfer red to Genera l Reserve 200.00 200.00Amount car r ied over 5952.86 5210.10WORKING RESULTSThe year under cons ide ra t ion was e n d e d with a p osi t ive note for the Company with a sales growth o f around 1 3 % . During th e yearth e Company has ach ieved a t u r nove r of Rs. 131.99 Crores, an increase of approx imate ly 13% over p rev ious year ' s t u r nove r ofRs. 117.10 Crores . At th e same time th e Company has posted a pre- tax profit of Rs. 13.85 Crores against a pre- tax profit of Rs. 14.19Crores of the prev ious year, a marginal decrease of approx imate ly 2.40%. Despi te the cont inued s l o w d o w n in global market becauseof recession in global economy, th e Company has been able to achieve a sat isfactory resul t during th e year. Though there is a sign ofthe recovery in the world economy and the world market is coming out of the recessional impact, still the operat ions are underpressure. We hope we wil l be able to overcome th e same with passing of t ime an d wi th ou r sincere & ded icated efforts.Th e availability of Rough Blocks from th e domest ic quarr ies has imp roved as com pared t o last financial year since new quarr ies havestar ted operat ions. The company is continuing to import Rough Blocks f r o m South Af r i ca, Norway, Finland an d Brazil to augment th esupp ly of raw materials to meet i ts requ i rements.The Board is pleased to inform that during th e year, th e Company, for the ninth time, ha s received Specia l Expor t Award from CAPEXILfor the year 2008-09. Further th e company was recognized as Sta r Expor t House during th e Year. Also th e Company has a l re a dyinitiated th e process o f implementing Integrated Management Systems (IMS) which inc ludes Q MS 9001:2008, EM S 14001:2004,O H S A S 18001:2007 and SA 8000 . The Company has al ready ach ieved upgradation to ISO 9001:2008 s tanda rds .DIVIDENDYour Directors are pleased to recommend a dividend of 10% (Re. 1/- per Equity Share of Rs. 10/- each) for the year ended 31 st March2010 s ub je c t to the approva l of the m em bers at th e Annual Genera l Meeting. The register o f m em bers and share t ransfer register shallremain closed from 24.07.2010 to 29.07.2010 (both days inclusive) for the pu rpose o f AGM and f o r paymen t o f d iv i dend .FIXED DEPOSITTh e Company has not accepted any f i xed depos i t from the publ ic.DIRECTORSSh . Pradeep Kumar Jain was appointed as an Addi t ional Director with effect f rom 2 4 . 04 . 2 010 . Th e term of his office expi res at theforthcoming Annual Genera l Meeting Company and for h is r e -appo in tmen t th e C o m p a n y has received notice p ru su an t to Section 2 57to the Companies Act , 1956 from a m em ber , propos ing h is cand ida tu re for the off ice of Di rec tor of the Company wh os e per iod o foff ice wil l be l iable to determination by reti rement by rotat ion.AUDITORSTh e Aud i to r s of the company M/S Alok Mittal & Associates, Chartered Accountants ret i re at the conclusion of the ensuing Annua lGeneral Meeting of the Company and being eligible of fer themselves fo r reappointment.

8/6/2019 4719-10

11/36

Aro gra ni te indus t r ies ltd.

CORPORATE GOVERNANCEPursuant to Clause 49 o f the L is ting Agreem ent with th e Stock Exchanges, Management Discussion an d Analysis, Repor t on CorporateGovernance and Au d i to rs ' Cer t i f icate regarding compl iance o f the cond i tions o f Corporate Go vernance are made a part of th is AnnualReport.DIRECTORS' RESPONSIBILITY STATEMENTPursuant to the requ i rement und er sect ion 217(2AA)of th e Companies Act 1956 with respect to Directors' Responsibi l i ty Statement ,it is hereby con f i rmed that:i) in the preparat ion of the annua l accounts, the applicable account ing standards ha d been f o l low ed a long with proper explanation

relating to mater ia l departures;ii) the d i recto rs ha d selected such account ing policies an d appl ied them consistently an d made j udgements and estimates that ar e

reasonable an d p rud e n t so as to give a t r ue an d fair v iew of the state of affairs of the company at the end o f the f inancial yearan d of the profit or loss of the company fo r that per iod ;

iii) th e d i rec to rs had taken proper and su f f ic ient care for the maintenance o f adequa te accoun t ing records in accordance with th eprovisions of this Act for sa fegua rd ing th e assets of the company and for prevent ing an d de tecting f rau d an d other i r regular i t ies;

iv) the directors had prepared the annua l accounts on a going concern basis.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEAdditional information on conservat ion o f energy, technology absorpt ion, fo re ign exchange earn ings and outgo as requ i red in te rmsof Sect ion 217(1) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the Report of the Board ofDirectors) Rules, 1988 is annexed he re to an d f o r m s par t of this repor t .PERSONNELTh e Indust r ia l relation throughout the year w as smooth. Your Directo rs are pleased to place on record their appreciat ion fo r cont r ibu t ionmade by the employees at all levels in achieving the object ives of the comp any. The Statement of part icu lars of employees as per s u b -section (2A) of sect ion 217 of the Companies Act 1956 read with Companies (Part icu lars o f Employees) Rules 1975, for the yearended 31 st March 2 0 1 0 is annexed hereto an d f o rm pa r t of the Report.LISTINGTh e Equity Shares of the Company ar e l isted in Bombay Stock Exchange Limited an d National Stock Exchange of India Limited . Listingfees for the year 2 0 1 0 - 2 0 1 1 have already been paid to The Bombay Stock Exchange Limited and National Stock Exchange of IndiaL imi ted.A CK N OW L EDG EM EN TYour Board wishes to place on r eco rd its sincere thanks to all the customers, suppl iers, bankers fo r ex tend ing suppo r t to you r Company .Board in specific wishes to place on record sincere appreciation of the cont r ibut ion made by all its employees with c o mmi t me n t ,towards the growth of y o u r Company.

For and on behalf of the Board

Place: New Delhi Suni l K Aro ra - Kasturi Lal A r o r aDate: 24.04.2010 Managing Directo r Di recto r

8/6/2019 4719-10

12/36

A r o granite i n d u s t r i es ltd.

ANNEXURE TO THE DIRECTORS' REPORTInformation p u r s u a n t to the Comp a n ie s (Disc losu re o f Part icu lars in the Repo r t o f Boa r d o f Di rec tors ) Rules 1988.CONSERVATION OF ENERGYTh e plant insta l led by the Company is of latest technology and i s ene r gy ef f ic ien t . Power consumption of the Company i s very low.During th e yea r un de r c on s i de ra t i on a total 10726233 un i t s we re c on s ume d a n d th e p e r Sq . mt. power c o n s u m p t i o n cost only R s.1 2 5 . 3 2TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATIONCompany has not imported an y technology. Effect ive pollution control system has a l r ead y been insta l led in the factory. Total QualityManagement System has a l ready implemented. Due to i ts consis tent ef for ts th e c omp a n y c o u l d ach ieve improvement & d e v e l o p m e n tin th e quality of the produc t . It has also achieved process deve lopment, cost red uct ion etc .FOREIGN EXCHANGE EARNINGS AN D OUTGOThe deta i ls regarding foreign exchange ea rn ings and outgo are given in Notes to Prof i t & Loss A c c o u n t and Balance Sheet .Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act 1956and theCompanies (Particulars of Employees) Rules 1975forming part of the Directors ' Report for the year ended March 31, 2010E mp loyed throughout th e yea r ended March 31, 2010 n r ece ip t o f remuneration no t less than Rs. 24,00,000/- p er anumn

Nam e

Mr . Suni l K A r o r a

A ge

51 Years

Qual i f i ca t ion

B . S c

Exper ience

2 3 Years

Date ofCom m encem ent ofEm pl oym ent0 3 . 0 5 . 1 9 8 8

Designation

Managing Di rector

Rem u nera t i on

14600000/-

LastEm pl oym ent

Since Inception

8/6/2019 4719-10

13/36

Aro granite industr ies ltd.

Management Discussion and AnalysisGranite Industry-Structure and DevelopmentsIndia, one of the leading count r ies in the production and expo r t o f granite and other stones, has vast resou rces of granite with about1 1 0 variet ies of different co lou rs and tex tu res such as black, grey, pink, multi coloured etc. These variet ies are used to p roducemonumen ts , building slabs, t i t les, sur face plates etc. The deposi ts a re wide l y spread over the ent i re count ry . However , popula rvariet ies a re mainly found in South Ind ia .Grani te i s a non-schedu led i ndus t ry and hence ent repreneurs are only requ i red to submi t Indus t r ia l Ent repreneur Memorandum.Looking at i ts . expo r t poten t ia l, Gover nmen t of India has been encouraging set t ing up of 100% Expor t O r ien ted Units in this sector topromote export o f va l u e added granite p rodu c t s .Export of Gran i te an d Marble is f reely a l l owed . Granite is expor ted mainly to Japan, USA,UK , Germany, Nether lands, Italy, West Asia.O v e r th e last t h ree d ecad es th e Indian grani te industry has m ode rn i sed to global standards. Sculp tu res and monumen ts made in Indiaar e being expor ted a l l over the world.OutlookToday th e d e m a n d fo r grani tes fo r both blocks and f in ished products i s encourag ing . Th e recession being over and most of the af fectedeconomies looking and moving ahead , India ca n improve its expor t per fo rma nce as the processing capacity is very low, with less than5% of gangsaws installed in the world. The increase i n expor t of blocks and f in ished p rod uc ts during the last year is an indication oft he encou rag i ng signs o f marke t imp rovemen t .India, which is blessed with var ious types of un ique c o lou r s and large depos i ts of granite, is certain to get i ts du e share in the ever-growing world market . Many count r ies a re wor r i e d about the s t rong ent rance o f China in the m arke t but the fact is that China landedu p importing m o r e r o u g h blocks and f in ished p rodu c t s due t o high domest ic d e m a n d .The world wide improvement of t ranspor ta t ion system with more and more bu lk vessels will also help many coun t r ies to import m orethereby boost ing ou r e xp o r t s .Th e market potential is abundant and there are excellent prospects for the Indian granite industry to get its due share in the worldmarket . The profess iona l and real ist ic approach towa rd s so lv ing the pract i ca l p rob lems and c a re fu l planning o f facil i t ies by the Indus t ryand G o v e r n m e n t ca n make India the leading expo r t e r of the world market . We have chal lenging years ahead but the potential fo rgrowth i s beyond any reasonable doubt.Opportunities & Threats for the Indian Granite IndustryThe Factors he lp ing th e growth of the indust ry are1. I n t r oduc t i on of Stones for New appl icat ions and uti l i t ies Et c2 . Sp u r t in demand fo r Indian Gran i tes Worldwide.3. Increased domest ic d e m a n dTh e major th rea t areas i nc l u de1 . The con t i nu ou s eros ion of Euro against Rupee2 . Economic imbroglio in S ome European Count r ies3. Non Availability of best quality blocks fo r processing.4. Frequent p o w e r d i s r up t i on s and high dependency on d iese l affecting th e production and the cos t of Raw materials and Finished

goods .5. A bsence o f p rope r i n f ras t r u c t u re .Risks an d ConcernsTh e increase in Compet i t ion at both National and Internat ional level m ay resu l t i n Lower profitability and r e duc t i on in sell ing pr ice.Further unstable c u r re n c y f l uc tua t ions too af fect th e profitability of the Company.

8/6/2019 4719-10

14/36

Aro granite indus t r ies ltd.

Product wise PerformanceInd ia 's Expor t of Granite during th e last tw o years is as fo l lows. (Rs in Crores)

2008-09 2009-10 % in G r o w t hTotal expor t o f Gran i te p roduc ts 2738.00 5000.00(approx. ) 45.00(approx. )A R O ' S Export of Granite Products 111 .04 122.67 10.47Internal Control Systems and their adequacyThe Company has adequ a t e system of in te rna l cont ro l re lat ing to the purchase of Raw Mater ia ls, Stores , Consumab les and PackingMaterials and for the sale of goods commensurate with the size of the Company and the nature of business.Th e system of in ternal con t r o l of the Company i s adequ ate keep ing in mind th e size and complex i ty o f you r Comp a n y ' s bus iness.Systems are regu la r ly rev iewed to ensu r e ef fect iveness.Discussion on Financial Performance with respect to operational PerformanceThe turn over achieved by the Company for the Year e n de d 31.03.2010 is Rs 1 3 1 . 1 3 Crores Compared to the Previous Year t u rn ove rOf R s 116.11 Crores showing an increase of 12 .94 % . Th e sales in Quantity has also increased from 5,51,234 S q Mtrs to 6,06,131Sq Mtrs. The Product ion during th e year was 5,98,567 S q Mtrs compared to 5,89,795 S q Mtrs of the last Year. Prof i t before ta xstands at Rs 13.85 Crores against Rs 14.19 Crores of Last Year. Th e Profit after Tax is Rs 10.64 Crores compared to Rs 11.98 Croresof Last Year. The Earning Per Share is Rs 10.27 against Rs 10.81.Material developments in Human Resources / Industrial Relations front including th e number o f people employedTh e Company cont inues to invest in training and education of its employees and has been organizing var ious training programme fromt ime to t ime.Th e Com pany emphasizes training and motivation as i t is the key to improve prod uct i v i ty . Intensive i n du c t i on program of new r ec ru i t san d skill based t ra in ing programs a re being carr ied ou t . HR policies ar e being al igned with th e cu r ren t t rends in the market. Variouswelfare activities and incentives are being carr ied out for staff and workers alike making ARO an enjoyable place to be associated with.Th e Company maintains cordial relations with it s employees an d takes al l possible care fo r their wel fa re .

8/6/2019 4719-10

15/36

Aro gran i te indust r ies ltd.

Corporate Governance Report1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE:

Th e Company believes in good Corpora te Governance, which is an integral part of its business ethics. Through Corpora teGove rn a n c e , th e com pany wan t s to ach ieve highest level of t ransparency, accountab i l i t y and equ i ty in all its activi t ies andfunct ions. The overa l l ta rge t is to enhance the value of the s takeholde rs by provid ing them with a ll sor ts o f i n format ion withregard to the functioning of the Com pany and remain commi t ted to the highest level o f cus tom er sa t is fac tion and h igh standardof business ethics in the long run. The Company firmly believes that over a period of time all its operations and act ions mustserve t he u nde r l y i ng goa l of enhanc i ng overa l l sha reholde rs va lue .

2. BOARD OF DIRECTORS:The Board of D i rec tors p resen t ly consists of S ix D i rec tors compr ise of f ive Non-Execut ive Di rec tors (NED)o f wh i ch t h ree areIndependent. The Chairman is Non-Execut ive. Five Board Meetings were held during the Financial Year ended 31 st March 2010on 30 th Apr i l 2009, 0 8 th June 2009, 2 9 th Ju ly 2009, 2 7 th O c t o b e r 2009 and 1 3 th January 2010.At tendance and other detai ls a reg iven be low:

SI.No

(1)1

23

4

5

67

Name of D i rec tor

(2 )Shr i Suni l K Aro ra ,Managing Di rec torShri Kasturi Lal A r o r aShr i Dinesh C h a n d r aKothariShr i S u n d a r e s h w a r aG. Sastry@Shr i R a h u l G u p t a

S m t Su ja ta A r o r aShr i Pradeep KumarJa in@@

Category

(3 )Execut ive

Non-Execu t i veNon-Execu t i ve& I n de p e n de n tNon-Execu t i ve& I n de p e n de n tN o n - E x e c u t i v e& In de p e n de n tNon-Execu t i veNon-Execu t i veI n de p e n de n t

No. ofBoardMeetingsAttended

(4)5

55

1

2

2-

At t end anc eat last AG M(30.07.2009)

(6 )YE S

YESYE S

NO

YE S

NONO

O u t s i d e Directorship (Col. 7) andC ommi t t e e posi t ions (Col. 8 & 9)

D i r e c t o r s h i p #

(7)1

NIL5

NIL

2

NILNIL

C ommi t t ee*Me mb e r s h i p

(8 )-

-1

-

-

--

C ommi t t e e *Cha i rmansh ip

(9 )-

--

-

-

--

@ Resigned w.e. f . 26.04.2010 @ @ A p p o i n t e d w.e.f24.04.2010# As pe r Section 2 75 read with Section 278 of the Companies Act, 1956.* O n l y covers Membersh ips /Cha i rmansh ip of A u d i t Commi t tees and Shareho l d e rs / Inves to rs G r ievance Commi t tees .

The Board pe r iod ica l ly rev iews Compl iance Reports of all laws appl icab le to the Com pany and has pu t in p lace p r o c e d u r e toreview steps to be taken by the Company to rectify instances of non-compl iances, is any.3. AUDIT COMMITTEE

The Terms of Refe rence of the Commi t t ee conf i rm to the prov is ions o f Sect ion 2 9 2 A of the Com panies Act 1956 and Clause 49of the Listing A g r e e m e n t . The Commi t t ee consists of the f o u r Non - Exe c u t i ve Di recto rs namely Shr i Dinesh Ch a n d ra Kothari(Chai rman of the Commi t t ee ) , Shr i Kastu r i La l Aro ra , Shr i Rahul Gup ta and Shr i Sun da re s h wa ra G . Sastry o f which th ree arei n dependen t . Com pany Secretary acts as the Secretary of the Committee. During the f inancial year e n d e d 31.03.2010, f o u rmeet ings of the Audit Commi t t ee w e r e held . Dates of meet ings (Number o f Membe rs a t t ended ) : 30 th Apr i l 2009(4), 2 9 th July2 0 0 9 ( 2 ) , 2 7 th O c t o b e r 2009(2) and 13th January 2010 (2).

4. REMUNERATION COMMITTEE (NON-MANDATORY)Th e Company does no t have any permanent Remunera t ion Committee.

1 3

8/6/2019 4719-10

16/36

Aro granite industr ies ltd.

5. REMUNERATION PAID TO DIRECTORSa) Executive Directors: The aggregate value o f salary, H R A paid during th e f inancial year ended 31st March 2010 to

Shr i Sun i l K. Aro ra , Managing Director was Rs. 72,00,000/- plus commiss ion o f RS. 74,00,000/-b) Non-Executive Directors: . During the year 2009-2010 the Company haspaid sitting fees aggregating to Rs. 2,00,000/- to

all the Non-Execu t i ve Directors fo r attending the meet ings of Board and/or Committee thereof. In addition to sitting feesR s . 5,00,000/- each was paid as commiss ion to Shr i Kasturi Lal A r o r a and Smt . Suja ta Aro ra , Non-Execut ive Di rec tors .

6. SHAREHOLDERS' / INVESTORS ' GR IEVANCE COMMITTEETh e Company has Shareho lders ' / Investors ' Grievance Commi t tee at the Board Level which consists of three Directors, namelyShr i Kasturi Lal Arora (Cha i rman of the committee), Shr i Sun i l K Aro ra an d Shr i Dinesh Chand ra Kothar i . Th e compos i t ion of thecommittee is in conformity with clause 49(IV)(G)(iii) of the Listing Ag reemen t . Shr i Sabyasachi Panigrahi, Company Secretary isthe Compl iance of f i cer of the Committee w ho overseas th e inves tors grievances including Transfer/Transmission o f EquityShares, Demater ia l isat ion/Remater ia l isat ion of Equity Shares, non-rece ip t of Div idend, A n n u a l Reports etc.Al l the complaintsrece ived by the Com pany have been resolved promptly to the sat isfact ion of the Shareholde rs . All the valid requests fo r t ransfe rof Equity Shares in physical form w e r e processed in time and there are no pending t ransfers of Equity Shares.

7. GENERAL BODY MEETINGFor the year2006-2007

2007-2008

2008-2009

VenueSri Sathya Sai International Cent re ,Lodh i Road Institutional Area , Lodh i Road,Pragati Vihar, New Delhi 110003Sr i Sathya Sai International Centre,Lodh i Road Institutional Area, Lodh i Road,Pragat i Vihar, New Delhi 110003Sri Sathya Sai International Cent re ,Lodhi Road Institutional Area, Lodh i Road,Pragati Vihar, New Delh i 110003

Day, Date & TimeWednesday, 2 2 nd A u g u s t2007 at 12.30 RM.

Satu rday, 26th July 2008at 11.30A.M.

Thursday, 30th July 2009at 10.30A.M.

Whethe r Sp l Resolut ionY E S

YES

YE S

During the year 2009-10, approval o f Shareholde rs w as obtained through Postal Bal lot for t ransfer, sale, lease or o therw isedisposal of the whole or substant ia l ly the whole of one manufacturing unit (Unit-l) of the Company located at 103, SIPCOTIndus t r ia l Complex, Hosur Tami l Nadu 635126 engaged in manufac tu re of granite t i les. Numbe r o f val id postal bal lot formreceived was 155. Votes in favour of the resolution was 44,61,435 where-as votes against the resolution was 10,171. Numberof invalid postal ballot form rece ived was 37. Ms. Latika Jetley, Practising Company Secreta ry ha d been appointed as thescrut inizer for the potal ballot process and she conduc ted the postal ballot exercise. The resu l t of the postal bal lot w as dec la redon 18.01.2010

8. DISCLOSURESDisclosures on materially significant related party transactions, i.e. transactions of the Company of material nature, with itsPromoters, the Directors or the Management or relatives etc. that may have potential conflict with the interest of the Companyat large: N O N E . Sui table d isc losu res as requ i red by Accounting Standard (AS- 18 ) on Related Party Transactions has been m adein t he Annu a l Repor t .Details of Non-Compl iances by the Company, penalties, strictures imposed on the Company by Stock E xchange or S E B I or anyother Statutory Authorities, on any matter related to Capital Market, during the last three years. There was no cases on non-compl iances of any matter re lated to Capital Market during last th ree years

9. M EA N S OF COMMUNICATIONQuarterly, Hal f -year ly and A n n u a l Financial Results are normally publ ished in leading National newspapers i.e. Th e EconomicTimes, Business Standard, Financial Express, Pioneer, Veer A r j u n having w i d e circulat ion and promptly f u rn ished to the StockExchanges for display on their respective w eb sites. The "Management Discussion & Ana lys is " and "Sh a re h o lde rs Information"f o rm s part of the Annual Report .

10. (i) GENERAL SHAREHOLDERS INFORMATION(a) Annual General Meeting

Da y & Date : Thursday, the 29 th July 2010Time : 10.30A.M.Venu e Lakshmipat Singhania Auditorium, PHD Chamber of Com m erce and Indust ry ,

PHD House, 4/2, Sir i Institutional Are a , Augus t Kran t i Marg, New Delh i 110016

14

8/6/2019 4719-10

17/36

Aro grani te indust r ies ltd.

(b ) As r e q u i r e d u n d e r clause 49( IV) (G) ( i ) , a brief r esu me and other par t icu la rs of the appo in tmen t of Direc tors re t i r i ngby rotation at the aforesa id A n n u a l Genera l Meeting and seeking r e -appo in tmen t are being given in the Exp lana toryS ta te me n t to the Not ice convening the said meet ing .

Financial Calendar (Tentative)Financial Repor t ingFo r th e qu a r t e r end ing 30.06.2010For the hal f year end ing 30.09.2010Fo r the quarter ending 31.12.2010Fo r th e Year end ing 31 . 03 . 201 1 (Aud i t e d )A n n u a l Genera l Meeting for the Financial Year 20010-2011

By en dJuly 2 0 1 0O c t o b e r 2010January 2011April/May 2 0 1 1Ju l y/ Au gu s t 2011

(iii) Date of Book Closure : From 24.07.2010 to 29.07.2010 (both days inclusive)(iv) Dividend Payment Date : Befo re 2 8 th A u g u s t 2 0 1 0(v ) Listing on Stock Exchange(s) including Scrip Code:

S r . No12

Name of the Stock ExchangesBombay Stock Exchange LimitedNational Stock Exchange o f India Limited

Scr ip Code No5 1 3 7 2 9AROGRANITE/EQ

Th e Listing Fee for the year 2010-2011 has been paid to the said Stock Exchanges,(vi) Market Price Data (Rs)

MONTHS (2009-2010)A P R I L 2009MAY 2009JUNE 2009JULY 2009AUGUST 2009SEPTEMBER 2009O C T O B E R 2009N O V E M B E R 2009DECEMBER 2009J A N U A R Y 2010FEBRUARY 2010MARCH 2010

Bombay Stock ExchangeLimited (BSE)

HIGH43.905 2 .1060.0047.5044.5048.5047.8542.4046.205 2 . 0 052.7050.50

LOW28.5033.3039.5040.0038.5039.653 9 .1536.3039.3043.1042.2042.45

National Stock Exchangeof India Limited (NSE)HIGH30.0051.5059.7547.0044.7048.1047.4042.0048.0056.0052.4551.40

LOW27 .6530.2037.8539.4038.0038.5538.5538.1039.0042 .5041.2042.55

(vii) Share Transfer System:All valid requests fo r t rans fe r / t ransmiss ion of Equity Shares in physical form are processed within a per iod of 1 5 - 2 0 daysfrom the date o f rece ip t t he reo f and t he share cert i f icates d u l y t rans fe r red a re immed ia te ly re t u rned t o t he t rans fe ree/l odger . In the case of Equity Shares in e lectronic f o r m , the transfers are processed by NSDL/CDSL t h r o u g h th e respect iveDepository Part ic ipants.

(viii) Dematerial isation of Shares & Liquidity:

Trad ing in the Equity Shares of the Com pany is permi t ted only in demate r ia l ised form. Shareho lders m ay dematerial isethei r sharehold ings with one of the depos i tor ies namely NSDL and CDSL. The ISIN No. of the Company 's Equity Share isINE210C01013 . Th e Equity Shares of the Company are actively t raded on the B omb a y Stock Exchange Limited andNational Stock Exchange of India Limi ted . As on 3 1 . 0 3 . 2 0 1 0 , 97,96,179 ( 94 .55%) Equity Shares of the Company havebeen demate r ia l ised .

15

8/6/2019 4719-10

18/36

Aro granite i ndus t r ies ltd.

(ix)

(x )

Distribution of Shareholding (As on 31.03.2010)No of Equity Shares(Range)

1-250251-500501-10001001-20002001-50005001-10000Above 10000Sub-TotalTotal

No of Share HoldersPhysical

Form1 1 5 5

32 21 2 52214

33

1644

DematForm2 2 2 7486260121763472

32764920

No of SharesPhysical

Form1207671409259680029875382502 8 1 2 5

109800564542

DematForm

181377186611197518176824247991245894

85599649796179

10360721

% of Sharehold ingPhysical

Form1.171.360.930.290.370.271.065.45

DematForm1.751.801.911.712.392.37

82 .6294.55

100.00Shareholding Pattern (As on 31.03.2010)

Sr. No1234

Shareholders No of Shares %Directors & Relatives 41,76,421 40.310Non-Res ident Ind iv idua ls /OCBs 4,87,609 04.706Private Corpora te Bodies 11,38,271 10.987Genera l Public 45,58,420 43.997Total 1,03,60,721 100.00

(xi) Outstanding CDRs/ADRs/Warrants and likely impact on EquityThere are no outstand ing GDRs/ADRs/War ran ts of the Company.

(xii) Plant LocationsUnit I

Corp. Off. & Works

103, SIPCOT Industr ial ComplexHosur, Tamil Nadu, 635 126At: Koneripalli Village, Via:Shoolagir iTaluk: Hosur, Dist: Krishnagir iTamil Nadu 635 117

(xii) Address fo r Correspondence regarding share transfers and other mattersAr o granite industries ltd.S -1 6 , Second FloorGreen Park ExtensionNew Delhi 110016Phone No.: 91-11-26511021Fax No.: 9 1 - 1 1 - 2 6 5 1 1 0 2 2E mail: investorgrievance@aroti le.com

Registrar & Transfer Agent (RTA)M/s Alankit Assignments LimitedAlankit House, 2 E / 2 1 , Jhandewalan ExtensionNew Delhi 110055Phone N o : 9 J - 1 1 - 2 3 5 4 1 2 3 4 , 9 1 - 1 1 - 4 2 5 4 1 2 3 4Fax No.: 9 1 - 1 1 - 2 3 55 2 0 0 1 , 9 1 - 1 1 - 42 5 41 2 0 1E mail: alankit@alankit.com

11 . DECLARATIONThis is to conf i rm that all the Directors and Senior Management Personnel of the Company have aff i rmed compliance with th ecode of c o n d u c t fo r Directors an d Senior Management adopted by the Board .

Suni l K Aro raManaging Director

16

8/6/2019 4719-10

19/36

Aro grani te indust r ies l t d .

Auditors' Certificate on Corporate GovernanceTo,Th e Members,Aro granite industr ies l imited,We have examined the compliance of the condit ions of Corporate Governance by Aro granite industr ies l imited, for the year ended31 st March 2 0 1 0 , as stipulated in clause 49 of the Listing Agreement of the said Company with th e Stock Exchanges.Th e compliance of condit ions of Corporate Governance is the responsibility of the management. Our examination was limited to theprocedu res an d implementat ion thereof , adopted by the Company for ensur ing th e compl iance of the condi t ions of CorporateGovernance. It is neither an aud i t nor an expression of opinion on the financial statements of the Company.In our opinion and to the best of our information and accord ing to the explanat ions given to us and representat ions made by theDirectors & Management, we certify that the Company has compl ied with the conditions of Corpora te Governance as stipulated in theclause 49 of the above mentioned Listing Agreement.As requ i red by the Guidance Note issued by the Institute of Char te red Accou n t an t s o f India, we have to state that as per the r eco r d smaintained by the Company as on 31 st March 2010 there were no investor grievances remaining una t tended /pend ing fo r more than30 days.W e further state that such compl iance is neither an assu rance as to the future viability of the Company nor the eff ic iency or ef fect ivenesswith which the management has conduc ted th e affairs of the Company.Fo r Alok Mittal & Associates,Chartered Accountants

(Alok K. Mittal)PartnerM.No. 71205Place: New Delhi.Dt: 24.04.2010

17

8/6/2019 4719-10

20/36

Aro g ran i te indus t r ies ltd.

Auditors' ReportTo th e M e m b e r s of ARO GRANITE INDUSTRIES LTD.We have aud i t e d th e attached Balance Sheet of ARO GRANITE INDUSTRIES LTD. as at 31st March 2010. The f inancial s ta tementsar e th e responsib i l i ty of the Company's managemen t . O ur respon sibi li ty is to exp ress an op in ion on these f i nanc ia l s ta tements basedon our audit.W e c o n d u c t e d ou r audit in accordance with auditing s ta n da rds general ly accepted in India. Those Standards requ i re that w e plan andper form th e audit to obta in reasonab le assu rance about whe the r th e f inancial statements a re f ree o f material misstatement. An au d i tinc ludes examin ing , on a test basis, evidence suppor t i ng th e amoun ts and d isc losu res in the f inancial s ta tements. An audit also inc ludesassessing th e accoun t i ng princip les u sed an d signi f icant estimates m a d e by m anagem en t , as wel l as eva lua t ing the ove ra l l f inancials ta tement presentat ion. We believe that ou r audit p rov i de s a reasonable basis fo r ou r op in ion :As requ i red by the Companies ( Au d i t o rs Repor t ) O r d e r , 2 0 0 3 as a m e n d e d by the Compan ies ( Au d i t o rs ' Repor t ) A m e n d m e n t O r d e r ,2004 issued by the Cent ra l Government in t e rms of Sec. 2 2 7 (4A)of The Compan ies Act, 1956, w e annex hereto a s ta tement on themat ters speci f ied in the paragraph 4 and 5 of the said o r d e rFur the r t o ou r com m ent s in the a n n e xu re re fe r re d to in above pa rag raph , we repo r t that:a) We have obta ined all the i n f o rma t i on and exp lana t ions which to the best of ou r knowledge and be l ie f were necessary for the

p u rp os e of the audit.b) In our opinion, proper books of accoun ts as requ i red by law have been kept by the Com pany so far as i t appears from examinat ion

of the books;c) Th e Balance Sheet and Prof i t & Loss Accoun t d ea lt with by this r epo r t a re in ag reem en t with th e books of account ;d ) I n ou r opinion th e Prof i t & Loss A c c o u n t and the Balance Sheet comply with th e account ing standards specif ied by the Institute

of Char t e red Accou n t an t s o f India r e fe r re d to in sub section (3c)o f section 211 of the Companies Act, 1956.e) On t he basis of written representat ion received from th e d i rec tors as on 3 1 . 0 3 . 2 0 1 0 , none of the d i r ec to r s are d isqua l i f ied as on

31 st March 2010 from being appointed as di rectors in te rms of clause (g) of Section 274 of The Companies Act 1956.f ) In our op in ion , and to the best o f ou r i n fo rma t i on and acco rd i ng to the explanat ions given to us, the said accoun ts give the

in fo rma t i on requ i red by The Companies Act,1956 i n the m anner so requ i red and g ive a t r ue and fa i r v iew in confo rmi ty wi th th eaccount ing princip les genera l ly accepted in India;i) In the case of Balance Sheet, the state of the affa irs of the Company as at 31" March, 2 0 1 0 .i i) In the case o f Prof i t & Loss A c c o u n t , of the Prof i t of the com pany for the per iod ending on that date; andiii) In the case of Cash Flow Statement, of the cash f lows for the year e n d e d o n that date.

For ALOK MITTAL & ASSOCIATESCHARTERED ACCOUNTANTS

A L O K K . MITTAL(PARTNER)M. NO.-71205Place : New DelhiDate : 24.04.2010

Annexure to the Auditor 's ReportRepor t r e fe r re d to in ou r r epo r t o f even da te( i) The Company has main ta ined p rope r r eco r d s of f ixed assets showing full part icu lars i n c l ud i ng quanti tat ive detai ls and s i tuat ion

of f i xe d assets. All the assets have been physical ly ver i f ied by the managemen t during th e year and there i s a regu lar p rog rammeof ver i f ica t ion wh ich i n ou r opinion is reasonable having regard to the size of the Company and the natu re of its assets. Fixedassets d isposed d u r i n g th e year were not substant ia l and therefo re, do not af fect th e going concern assumpt ion .

(ii) The i nventory has been physical ly ver i f i ed during th e year by the Management. Th e company is main ta in ing proper records ofinvento ry. N o mater ia l d iscrepancies w e r e not iced on physica l ver i f i ca t ion between the physical stocks and the book records.(iii) The Com pany has not taken loans f r om th e parties listed in the register maintained u n d e r Sec. 301 o f the Compan ies Act, 1956 .

The company has not gran ted any loans to the parties listed in the register m ai n t a ined u nde r section 301 o f the compan ies Act,1956 .

18

8/6/2019 4719-10

21/36

Aro g ran i te indust r ies ltd.

(iv) In our op in ion and accord ing to the information an d explanat ions given to us, t he re are adequ a t e i n te rna l con t ro l p r oced u r escom m ensu ra t e with th e size of the Company and the nature of its business with regard to the purchase o f inventory, f ixed assetsand with regard to the sale o f goods .

(v ) In our opinion and accord ing to the information and explanat ions given to us , we a re of the opinion that there are no con t rac tsor ag reem en t s r e fe r re d to in sec t ion 301 of the companies Act, 1956.(vi) The Company has not accepted any publ ic deposi t , so c lause (VI) is not appl icable.(vi i) In ou r opinion, th e Company has in ternal audit system com m ensu ra t e with th e size and natu re o f i t s business.(viii) The compa ny i s not re qu i red to maintain th e cost r eco r d s u n d e r sect ion 20 9 (1 ) (d ) o f the Companies Act 1956, so clause (viii)

is no t appl icable.(ix) (a) The comp any i s regu la r in depos i t ing with appropriate author i t ies und i spu ted s ta tu tory d u e s i nc lud ing Investo rs Educa t ion

& Protect ion Fu nd , Providen t Fund, Employees' State Insurance, Income Tax,Sales Tax, Wealth Tax,Custom Duty, ExciseDuty, Serv ice Tax, Cess and other mate r ia l s ta tu tory due s applicable to i t .(b) According to information and explanation given to us, no undisputed amounts payable in respect of Income Tax, Sale Tax,Prov ident Fund, Inves tors Educat ion & Protect ion Fund , Wealth Tax,Serv ice Tax,Custom Duty, Excise Duty and Cess, we rein ar rears , as at 31 st March, 2010 for a per iod o f more than si x months from the date they becom e payab le .(c ) Accord ing to the information and exp lanat ion g iven to u s , there are no due s of sale tax, i ncome tax, custom du ty , weal th

tax, excise duty and cess wh ich have not been depos i ted on account o f any d ispu te.(x ) Th e company has no accu m u l a ted losses as at 31 st March, 2010, and i t has not incu r red cash losses d u r i n g the f inancial year

cove red ou r audit and the immed ia te ly preceding f inanc ia l year.(xi) In our opinion and accord ing to the information an d explanat ions given to us the c o m p a n y has not d e fau l ted in r epaymen t of

due s to banks and other f i nanc ia l institution.(xii) Accord ing to the information an d explanat ions g iven to us the company has not g ran ted any loans or advances on the basis of

secur i ty by way of p ledge of shares, deben t u res and other secur i t ies so clause (xii) is not appl icable.(xiii) I n ou r opinion, the com pany is not a ch i t fund or a nidhi / mutual benef i t fund/ society. Therefore, th e provisions o f clause 4 (xi i i )of the Com pan ies ( Au d i t o r ' s Repor t ) O r d e r , 2003 are not appl icable to the company.(xiv) (a) The Company has not made any dealing in shares during th e year u nde r cons i de ra t ion .

(b ) Based on audit p roc e du re s and to the best o f ou r knowledge and belief and accord ing to the information and explanat iongiven to us, the shares and secu r i t ies have been held by the company in i t s own name.(xv) In ou r opinion, the comp any has not given any guarantees fo r loans taken by o thers from Banks or Financial inst i tu t ions.(xvi) To the best o f ou r knowledge and bel ief an d acco rd i ng to the information an d explanat ion given to u s, no term loan w as availedby th e com pany during the f inancial year.(xvi i ) Accord ing to the information and explanat ions g iven t o u s and on overa l l exam inat ion of the balance sheet of the company, werepo r t that no fund ra ised on s h o r t - term basis have been used for long -term i nves tment .(xvi i i ) Th e company has not issued any de b e n tu re s .(xix) The com pany has not ra ised any m oney by publ i c issue during this year, so c lause (xix) s not appl icable.(xx) Accord ing to the information an d explanat ions given to us, no fraud on or by the company has been not iced or repor ted during

th e cou r se o f ou r audit.For ALOK MITTAL & ASSOCIATESCHARTERED ACCOUNTANTS

ALOK K . MITTAL(PARTNER)M. NO.-71205Place : New DelhiDate : 24.04.2010

19

8/6/2019 4719-10

22/36

Aro granite i ndust r ies ltd.

Balance Sheet as at 31stMarch, 2010SCHEDULES As At

31.03.2010( A m o u n t in Rs.)

As At3 1 . 0 3 . 2 0 0 9

SOURCES O F FUNDSSHARE HOLDERS FUNDShare Capita l 1Reserve & Surp lus 2

103,607,210.00870,158,562.62

110,835,000.00799,668,800.43

LOAN FUNDS 3Secured Loans 474,290,328.52

1,448,056,101.14595,708,468.59

1,506,212,269.02APPLICATION OF FUNDSFIXED ASSETS 4a) Gross Blockb) Less :Deprec ia t ionc) Ne t BlockINVESTMENTS 5

951,314,307.24272,198,893.46679,115,413.78

186,640.00

9 4 2 , 4 5 2 , 7 1 1 . 2 4229,872,271.64712,580,439.60

186,640.00C U R R E N T A S S E T S , & LOANS & ADVANCESa) Inven tor ies 6b) Debtors 7c) Cash & Bank Balance 8d ) O t h e r C u r r e n t Assets 9e) Loans & A d vances 1 0

502,358,941.68414,870,078.65

13,045,423.7364,899,244.7226,929,538.00

1,022,103,226.78

489,722,879.06416,075,797.65

8,404,663.3756 ,1 23 ,389 . 63

8 ,916 ,68 6 .11979,243,415.82

LESS:CURRENT LIABILITIES & PROVISIONSC u r r e n t Liabilities 11Provisions 12

Net Current Assets

161,497,557.4220,170,659.00

181,668,216.42840,435,010.36

104,169,851.3018,316,720.00

122 ,48 6 ,571 .30856,756,844.52

LESS: DEFERRED TAX LIABILITYDeferred Ta x LiabilityLess: De fe r re d Tax Assets Net Defer red Tax Liability

72,796,029.001,115,066.00

(71,680,963.00)1,448,056,101.14

64,314,465.131,002,810.03

(63,311,655.10)1,506,212,269.02

NOTES ON ACCOUNTS 22Th e S ched u le re fe r red to above and the notes t he reon form an in tegral part of theThis is the Balance Sheet re fe r red in our report of even da t e .fo r A L O K AAITTAL & ASSOCIATESCHARTERED A C C O U N T A N T S

i1 A L O K K. MITTAL SUNIL K. A R O R A K1 Partner Managing Di recto rI M. NO . -71205

accoun ts .

L. ARORADirec tor S.PANIGRAHICom pany Secretary

Place : New DelhiDate : 24.04.2010

20

8/6/2019 4719-10

23/36

Aro grani te indust r ies ltd.

Profit & Loss Account for the Year Ended 31stMarch, 2010SCHEDULES Fo r the Year Ended

31.03.2010( A m o u n t in Rs. )

Fo r the Year Ended3 1 . 0 3 . 2 0 0 9

INCOMETu rn ove rOther Income

1 314

1,319,922,366.007,225,520.99

1,327,147,886.99

1,170,965,659.0031,416,011.59

1,202,381,670.59EXPENDITURERaw Material Consump t i on( Inc rease) /Decrease in Fin ished Goods & W IPManufacturing O v e r h e a d sAdmin is t ra t i ve expensesStaff CostSell ing & Dis t r ibu t ioonDeprec ia t ionFinancial ExpensesLoss on sales of assets

Prof i t for the year befo re TaxLess: Prev ious year Income Ta x ad j u s t m en t s

Provis ion for Income Tax ( Cu r ren t )D e f e r red Ta xProvis ion for Fr inge Benefi t TaxProvis ion fo r Wealth Ta xProf i t for the year after Ta xLess : Provision of D iv i dend on Equity

Div idend Ta x

Prof i t for the year af te r D iv i dendA d d : Prev ious year profit

Less : Transfer to Genera l Reserve

Earn ing Pe r Share (befo re d e f e r r e d Tax)Earning Pe r Share (af ter de fe r re d Tax)NOTES ON ACCOUNTS

1 51617181920421

2 2

558,754,274.71(11,465,146.70)434,125,303.21

45,787,561.6261,059,453.4610,647,749.7543,048,035.6546,709,030.28

18,252.811,188,684,514.79

138,463,372.2072,547.01

23,530,021.008,369,307.00

-94,900.00

106,396,597.1910,360,721.001,760,805.00

12,121,526.0094,275,071.19

521,010,484.71615,285,555.90

20,000,000.00595,285,555.90

11.0810.27

446,973,322.72(33 ,528 ,08 9 . 98 )419 ,475 ,313 . 21

48,883,878.7758,501,563.14

8,038,081.6042,799,185.9269,299,289.75

25,666.511,060,468,211.64

141 ,913 ,458 .959 3 , 1 3 3 . 0 0

16,077,625.004,727,276.591,106,293.00

80,700.00119 ,8 28 ,431 .36

11,083,500.001,883,640.00

12,967,140.001 0 6 , 8 6 1 , 2 9 1 . 3 6434,149,193.35541,010,484.71

20,000,000.00521,010,484.71 1 1 . 2 4

10.81!The Schedu le refer red to above and the notes thereon form an integral part of the accounts.

This is the Prof i t & Loss A c c o u n t re fe r red in our r epo r t o f even da t e .fo r ALOK MITTAL & ASSOCIATESCHARTERED A C C O U N T A N T S

ALOK K . MITTALPartnerM. NO.-71205Place : New Delh iDate : 24.04.2010

SUNIL K . A R O R AManaging Di recto r K.

L. ARORADi recto r S.PANIGRAHICom pany Secretary

8/6/2019 4719-10

24/36

Aro granite i n dus t r i e s ltd.

Cash Flow Statement for the Year Ended 31st March, 2010(Amount in Rs.)

PARTICULARSA. C A S H FLOW FROM OPERATING ACTIVITIES

Net Prof i t be fore tax and e x t ra o r d in a ry item

2009-10

138,463,372.20

2008-09

141,913,458.95A d j u s t m e n t sDeprec ia t ion Prov is ionLoss/ (P ro f i t ) on sale of assetsDividend an d in te rest r ece ivedForeign cu r r ency fluctuation (Gain)(Loss (unrea l ised )Operating Profit before working capita l changes

43,048,035.6518,252.81

(3,727,455.85)(2,201,207.22)

175,600,997.59

42,799,185.9225,666.51

(5,973,390.63)(22,887,779.73)155,877,141.02

Adjustment for Working Capital Changes

B.

Decrease /Oncrease) in Inven tor iesDec r ease / d nc r ease ) i n De b to rsDecrease ( Increase) in o thers current assetsDecrease (Increase) in Loans & Advances(Decrease ) lnc rease in Current Liabilit iesCash from OperationsLess : Income Tax & Other Taxes Paid (Net)Cash flow b e fo re E x t r ao r d i na r y i temsNet cash from operationsCASH FLOW FROM INVESTING ACTIVITIES

(12,636,062.62)1,205,719.00

(8,775,855.09)(18,012,851.89)

58,087,663.12195,469,610.1121,839,125.00

173,630,485.11173,630,485.11

(90,231,654.85)(92,054,075.23)

5 , 1 9 6 , 6 1 2 . 2 314,384,817.903,464,726.36

(3 ,36 2 ,432 .57 )17,049,817.66

(20,412,250.23)(20,412,250.23)

Addition to fixed assets & capital

C.

D.

Purchase o f AssetsSale of assetsDividend and In te r es t ReceivedNet cash from investing ActivitiesCASH FLOW FROM FINANCING ACTIVITIESProceeds from B or row in g s ( S e c u r e d & U nsecu r ed )Bu y back of SharesIssuance of Share CapitalP aymen t of Dividend including Dividend TaxN e t Cash from financing Act iv i t iesTOTAL INCREASE / (DECREASE) IN C A S H AND CASH EQUIVALENT

(9,910,803.00)430,000.00

3,727,455.85(5,753,347.15)

(121,418,140.07)(31,013,099.00)

-(13,006,345.75)

(165,437,584.82)

(6,091,489.00)113,774.00

5,973,390.63(4,324.37)

(29,499,989.53)-

44,280,000.00(12,319,574.00)

2,460,436.47

Cash equivalent during the yea r b e fo re adjustment for foreignC u r r ency fluctuation ( A + B + C)A d j u s t m e n t for foreign cu r r ency fluctuation (ga in ) / loss

2,439,553.142,201,207.22

( 1 7 , 9 5 6 , 1 3 8 . 1 3 )22,887,779.73

Cash equivalent during the year after adjustment for foreignC u r r ency fluctuationCash & Cash equ iva lents at the beginning of the yearCash & cash equivalent at the end of the year

4,640,760.368,404,663.37

13,045,423.73

4,931,641.603,473,021.778,404,663.37

The a b ove cash flow s ta te me n t has been c omp i le d from and i s based on the audited accou n ts o f A ro granite i ndus t r ies ltd. for the yeare n d e d 3 1 s t March 2010 reported upon b y us a s on 24-04-2010 Ac c o rd in g to th e information a n d e xp la n a t ion given th e afo resa idcash flow s ta te me n t has b e e n p re p a re d p u r s ua n t to c lause 32 of the listing agreement with the stock Exchange and their allocationr equ i r ed f o r pu r pose a r e as mad e by t he c omp a n y .F o r A L O K MITTAL & A S S O C I A T E S ,CHARTERED A C C O U N T A N T S( A L O K K. MITTAL)PARTNERM. NO.-71205Place : New Delh iDate : 24.04.2010

22

8/6/2019 4719-10

25/36

Aro grani te i n d u s t r i es ltd.

Schedules to Balance Sheet and Profit & Loss Account( A m o u n t in Rs.)

As At As AtSCHEDULE 31.03.2010 31.03.20091 AUTHORISED SHARE CAPITAL

1,46,00,000 (PY.1,46,00,000) equi ty Shares of Rs. 10/- each 146,000,000.00 146,000,000.0040,000, 10% Conver t ib le Cumula t ive PreferenceShares ( CCPS ) of Rs. 100/- each.(RY. 40,000 CCPS) 4,000,000.00 4,000,000.00

150,000,000.00 150,000,000.00ISSUED, SUBSCRIBED A ND PAID UP1,03,60,721 Equity Shares ( Previous Year 1,10,83,500 Equity 103,607,210.00 110,835,000.00Share ) o f Rs. 10/- each(7,22,779 Shares ext inguished by the Company during the year, se e Note " S " )

103,607,210.00

RESERVES & SURPLUS

110,835,000.00

a) Share Premium A c c o u n tAs pe r Balance Sheet 70,590,000.00 30,000,000.00A d d : Adition D u r i n g th e year 40,590,000.00Less : Util ised During the year for Buy Back of Shares 23,785,309.00

46,804,691.00 70,590,000.00b) General Reserve

As pe r last Balance Sheet 208,068,315.72 225,013,315.72Less : Bonus Share Issued 36,945,000.00A d d : Transfer from Profi t & Loss A/c 20,000,000.00 20,000,000.00

228,068,315.72 208 ,068 ,315 .72c) S u r p l u s in Prof i t & Loss A c c o u n t 595,285,555.90 521,010,484.71

870,158,562.62 799,668,800.43SECURED LOANSa) Term Loan f r om th e ICICI Bank Ltd.

(S ecu r ed by way of 1st Charge on all the Immo vable and Movable 145,199,040.00 193,598,720.00assets inc lud ing all Movable Machinery and Movable Fixed Assets ofUnit II both present and f u t u r e . Also secu red by personal guaran teeof Mr.Sunil K Arora )

b) ( i ) - BOB CC A/c 22,667,630.02 30,044,662.81- Packing Cred i t B O B & HSBC 173,795,958.74 176 ,146 ,147.23

(iii) Foreign Bills Discounted from Bank B O B & HSBC 131,227,188.21 194,139,253.00(Secu red by way o f hypothecat ion o f Stock , Pledge o f Govt .Secur i t ies , ECGC, an d Book Debts of both th e Units of theCompany on Pari Passu basis. Second charge on par i-passu basison Fixed Assets of the Unit - II and Personal guarantees of Promoters/Directors Mr . Suni l K Arora , Mr. Kasturi Lal Arora, Smt.Sujata Arora)

c) Sales Tax Term Loan 1,400,511.55 1,779,685.55474,290,328.52 595,708,468.59

23

8/6/2019 4719-10

26/36

SCHEDULE 4 : FIXED ASSETS (Amount in R s . )D ES C R I PT I O N S G R O S S BLOCK DEPRECIATION NE T B L O C K

As at A d d i t i ons / (De le t ion) As a t As a t D u r i ng th e01.04.2009 31.03.2010 01.04.2009 year

Land 18,298,922.55 - - 18,298,922.55Building 253,817 ,112.07 - - 253,817,112.07 28,744,308.62 8,477,491.54Plant & Machinary 586,077,987.05 5,428,761.00 - 591,506,748.05 175,819,504.95 29,561,265.24Furniture & F i x . 4,790,761.86 124,798.00 - 4,915,559.86 2,210,090.67 308,701.47Elect r ica l Equp. 48,001,897.38 175,250.00 - 48,177,147.38 10,006,238.24 2,283,941.33Office Equipment 12,666,832.33 653,259.00 - 13,320,091.33 5,014,187.17 655,421.63Vehic les 17,474,350.00 3,444,897.00 (1,049,207.00) 19,870,040.00 7,903,374.47 1,696,754.72Canteen Equipment 1,324,848.00 83,838.00 - 1,408,686.00 174,567.49 64,459.72TOTAL 942,452,711.24 9,910,803.00 (1,049,207.00) 951,314,307.24 229,872,271.61 43,048,035.65Previous Year 937,156,047.93 6,091,489.00 (794,825.69) 942,452,711.24 187,728,470.87 42,799,185.95

A d j u s t m e n t As at As at As atfor sale 31.03.2010 31.03.2010 31.03.2009

- 18,298,922.55 18,298,922.55- 37,221,800.16 216,595,311.91 225,072,80345- 205,380,770.19 386,125,977.86 410,258,482 10

2,518,792.14 2,396,767.72 2,580,67119- 12,290,179.57 35,886,967.81 37,995,65914

5,669,608.80 7,650,482.53 7,652,64516(721,413.80) 8,878,715.39 10,991,324.61 9,570,975.53

239,027.21 1,169,658.79 1,150,280.51(721,413.80) 272,198,893.46 679,115,413.78 712,580,439.63(655,385.21) 229,872,271.61 712,580,439.63 749,427,577.06

Arograniendusesd

8/6/2019 4719-10

27/36

8/6/2019 4719-10

28/36

Aro grani te indus t r ies ltd.

As AtS C H E D U L E 3 1 . 0 3 . 2 0 1 011_ CJ JI|J

Cre d i to r s for G o o d s / Serv ices __ _____________- pue tpJDthers _ ____ __ _ ___ __ _ 122,188,476.861DLLe.I_Capilal9oods_ _____________ _ _ __ 15,152,018.68Liabil i t ies __ ____________- S t a t u t o ry Du es ______ 2,039,941.00

__- Expenses^ __ __ __ 16,413,181.10Adva n c e F rom Cus tome rs ___5,703,939.78

_ _ _ _ _ _ ____ _ 161,497,557.4212 P R O V IS IO N S __ __ ___________ _____________

Provis ion fo r Income Tax (Net o f Income Tax Payment) ____2,752,183.00Div idend on Equity _ __ 10,360,721.00Corpo ra t e Div idend Tax 1,760,805.00Fringe Benefi t Tax (Netof Payment) _____ ___________-Bonus________ _____________________ ___ 2,016,377.00Gratuity ___ ________________________ _ 3,280,573.00___________ ______ 20,170,659.00

For th e Year____ _ ___ ^ Ended 31.03.2010

13 TURNOVER

( A m o u n t in Rs.)As A t

31.03.2009

81,158,264.80409 ,325 .00

1,753 ,541 .0018,955,894.201,892 ,826 .30

104,169,851.30

706,294.0011,083,500.001,883,640.00

106 ,293 .001,586,684.002,950,309.00

18,316,720.00

Fo r the YearEnded 3 1 . 0 3 . 2 0 0 9

Sales - ExportsSales - DTA

14 OTHERJNCOMEExchange Fluctuat ionDiv idend ReceivedJob Work ReceivedMisce l laneous IncomeInterest Received

1,241,839,327.0078,083,039.001 , 319 , 922 , 366 . 00

2,201,207.2210,764.00

1,045,373.00242,484.92

3,716,691.857,225,520.99

1,110,413,433.0060,552,226.001,170,965,659.00

22,887,779.7310,318.00

2 , 5 5 4 , 8 4 1 . 2 35,963,072.63

31,416,011.59

15 RAW MATERIAL CONSUMPTIONOpening StocksAdd : Purchases

134,520,568.46559,773,089.00

5 4 , 9 4 2 , 2 4 1 . 3 2526 ,551 ,649 .86

Less: Closing Stocks694,293,657.46135,539,382.75558,754,274.71

581,493,891.18134,520,568.46446,973,322.72

16 ( INCREASE) / DECREASE IN FINISHED GOODS & WIPO p e n i n g Stock 289,672,102.82 256 , 144 , 012 . 84Clos ing Stock 301,137,249.52 289,672,102.82

(11,465,146.70) (33,528,089.98)

26

8/6/2019 4719-10

29/36

Aro gran i te indust r ies ltd.

SCHEDULE17 MANUFACTURING O V E R H E A D S

Con s uma b le s Con s um p t ion sStores & Spares Consumpt ionsPacking Material Consu m pt i onsBough t O u t PurchasePower and FuelRepairs & Maintenance:- Plant & Machinary- Electr icalsOther Manufacturing ExpensesLabour ChargesFreight and forwarding ChargesExcise Duty Paid

18 ADMINISTRATIVE EXPENSESRepairs and Maintenance- Bui ld ings- Vehicles- O t h e r sTravelling and Conveyance- Employees (Foreign Travel Rs. 35,80,095/-) (RY. Rs.40,00,053/ - )- Director (Foreign Travel Rs. 24,28,818/-) (RY.Rs.50,13,597/-)Misce l laneous ExpensesPrinting and Sta t ione ryRentSecur i ty service chargesTelephone an d TelexAu d i t o rs Re mun e ra t i on- A u d i t o r ' s Fee- Tax Audit Fee- Other Management Serv icesProfessional Serv ice ChargesInsurance- Fixed Assets- Marine- O t h e r s- VehiclesBad Debts Written O ffRebate & Discoun tsServ ice Tax PaidDonat ionsRates & taxesLegal ExpensesMembership & Subscr ip t ions

Fo r the YearEnded 31.03.2010

175,062,701.1326,168,835.3237,612,762.9214,637,227.0075,015,187.00

12,009,875.84173,905.00509,718.00

29,542,982.0054,799,605.008,592,504.00434,125,303.21

2,442,021.501,594,154.903,440,677.50

9,571,812.202,549,555.42

159,363.001,450,252.00

662,360.002,842,133.004,177,860.43

225,000.0065,000.0025,000.00

1,301,308.00

303,254.713,400,524.00

777,373.79178,195.27

-6,806,019.00

116,398.00126,000.00

3,023,483.90407,979.00141,836.00

45,787,561.62

(Amount in Rs.)Fo r the Year

Ended 3 1 . 0 3 . 2 0 0 9

181,040,655.9815,264,805.6237,247,095.974,873,377.00

69 ,555 ,178 .00

17,130,375.98356,960.00951,421.00

27,654,763.005 5 , 5 3 2 , 2 5 7 . 5 59,868,423.11

419,475,313.21

4,722,001.003,046,688.942,011,382.50

10,095,872.005,615,598.00

142,530.421,523,646.50

681,810.002,930,372.004,314,618.80

200,000.00 I60,000.0020,500.00

2,355,901.00 L

274,047.00 j2,450,879.001,427,305.00 135,476.002,219,303.001,433,864.28 ]

5 3 1 , 2 9 7 . 0 0 j35,000.00

2 , 2 2 0 , 5 7 5 . 3 3 j233,763.00 jj201,448.00 |

48,883,878.77 1

8/6/2019 4719-10

30/36

Aro granite industr ies ltd.

( A m o u n t in Rs.)For th e Year For the Year

SCHEDULE Ended 31.03.2010 Ended 31.03.200919 STAFF COST

Salary & wages 44,157,123.46 41 ,667,627.14Employers contribution to Sta tu tory 1,800,749.00 1,745,840.00E S I Cont r ibu t ion 41,581.00 88,096.00Managerial Remunerat ions 15,060,000.00 15,000,000.00

61,059,453.46 58,501,563.14

20 SELLING & DISTRIBUTION COSTSales p romot i ons 8,719,769.75 5,800,604.60Adv. & Publicity 1,730,300.00 2,164,614.00Commiss ion 197,680.00 44,406.00Business Promot ions 28,457.00

10,647,749.75 8,038,081.60

21 FINANCIAL EXPENSESBank Charges 4,709,017.28 7,301,048.37Packing Cred i t 6,678,826.10 16,578,692.34Cash Credit 2,997,470.91 3,287 ,41 9 . 55Demand Draft Charges 30,847.00 42,061.00Foreign Bills Discounted / Purchases 15,428,349.03 18,003,709.18Interest on Unsecured Loan 78,937.00Interest on ICICI Term Loan 16,864,519.96 24,007,422.31

46,709,030.28 69,299,289.75SCHEDULE - 221. SIGNIFICANT ACCOUNTING POLICIESa) GENERAL - The accounts are prepared on h is to r i ca l cost basis and on the account ing principles of going concern . Accou n t i ngpolicies not specif ical ly referred to o therw ise are consistent and i n consonance with general ly accepted accou n t i ng pr incip les.b) FIXED A S S E T S - Fixed assets ar e stated at the cost of acquisi t ion inclusive of inward f re ight , du t ies an d taxes an d incidental

expenses re la ted to acqu is i t ion.c) DEPRECIATION - Deprec ia t ion on f i xed assets has been p rov i ded on St ra ight Line Method (SLM) basis and on p ro- ra ta basis onth e rates specif ied in schedu le XIV of the companies Act, 1956, as applicable on the last date of the account ing year.d ) INVENTORIES - Inventories ar e valued at the lower of the cost or net realizable value. The cost of the inventories is assigned by

using First-in First ou t (FIFO) Method. Raw material, Stores & Spares an d Packing Materials have been va lued a t cost. P r o c e s sStock is valued at cost, which is determined by taking direct mater ial , labour cost and certa in related Factory Overheads, FinishedGoods have been determined on full absorpt ion cost basis which includes al l d i rect cost, depreciat ion, etc.e) REVENUE R ECOGN IT ION - The Com pany fo l lows Mercantile System o f Accoun t i ng an d recognizes i n come a n d e xp e n d i t u re on

acc rua l basis.f) FOREIGN CURRENCY TR AN S ACTION : Transaction denomina ted in fore ign cu r renc ies aje normal ly recorded at the exchangerate prevai l ing a t the t im e of t ransactions.

Foreign Cur re n c y Liabilities incur red fo r acquis it ion of Fixed Assets are t ranslated at the exchange rate prevai l ing on the lastwork ing day of the accounting year or f o rwa rd cover rates, as applicable. The net variat ion arising out of the said t ransact ion isadjusted to the profit and loss accou n t .Other outstand ing fore ign cur rency assets an d liabilities are restated at the year-end rates. The net prof i t or loss arising onresta tement / set t lement i s ad jus ted to the profit & Loss accou n t .

g) B O R R O W I N G C OS TS : Bor r ow ing cost that are attributable to the acquis i t ion or cons t ruc t ions of qualifying assets are capital izedas a part of the cost of su ch assets. A qualifying assets is one that takes substant ial per iod of t ime to get ready fo r in tended u s e .All other borrowing costs are charged to r e ve n ue .

h) PROPOSED DIVIDEND : The company prov ides for the d iv idend as proposed by the Directors in the books of account, pendingapproval at the Annual General Meeting.

8/6/2019 4719-10

31/36

Aro gran i te indust r ies ltd.

i) CON TIN GEN T LIABILITIES : contingent l iabil i t ies are not p rov i ded and are disclosed by way of notes.j) RETIREMENT BENEFITS - The company 's contribution in respect of Prov ident Fund i s charged against r e ve n ue every year. In

respec t of Gratu i ty , Provis ion fo r Gratu i ty is made by charging Prof i t & Loss A c c o u n t by an amount based on the assum pt ion thatGra tu i t y is payable to all employees at the ye a r - e n d .

k) DEFERRED TAXATION - Defer red Tax ar i s ing from timing d i f fe rence between book and tax profit i s accou nted fo r u nder theliability method at the cur ren t rate o f tax, to the exten t that th e timing d i f fe rence are expected to crysta l l ize.

2 . NOTES TO ACCOUNTS:a. i. Bills of Exchange d i scou n t ed Rs. 1312.27 Lacs (RY.Rs.1941.39 Lacs)

i i. Gu arantee & coun te r Gu aran t ee Outstanding Rs. 28.50 Lacs (RY.Rs. 28 .50 Lacs )iii. Letter o f Cred i t Rs. 343.33 Lacs (PY. Rs 303.82 l a c s )

b. In compl iance with Accounting Standard - 22 relating to "Accounting fo r taxes on Income" issued by the Inst i tute ofChar t e red Accou n t an t s of Ind ia , the company has ad jus ted the de f e r red ta x liability (net)arising ou t o f timingd i f fe rence for the per iod upto 31st March 2010with th e Balance o f Defer red Tax Liability (Net) accru ing during th eyear aggregating to Rs.83,69,307/ - has been recognized in the Profit and Loss Accou n t .

c. The D e f e r red Tax Liability (net)of Rs 83,69,307/- cred i ted to Prof i t an d Loss accou n t i nc lu des R s .9 2 , 0 9 , 282 / -de f e r red ta x liability fo r Unit-ll, wh ich is having ta x hol iday under Income Tax Act and prov is ion has been made, basedon conserva t ive principles.

d . Major com ponen t s of Defer red Tax Assets and Liabil i t ies ar is ing on accou n t o f timing d i f fe rence are :(Rs. in "000 . )

DepreciationProvision fo r Gra tu i ty

Assets-

1,115

Liabilities72,796-

Related party Disclosure : As requ i red by Accoun t i ng S t anda rd - 1 8 issued by the Inst i tute of Char te red Accountantsof India. Th e d isc losu res are as g iven be low:

(Rs. in "000.)SI.No1.

2.

3.

Name of the Related partyMr . Suni l K A r o r a

Mrs. Su ja ta A r o r a

Mr. K.L.A r o r a

Relat ionshipKe y managemen t Personnel

Di recto r

Di rec tor

Transact ionRemn. / C o m m .Commiss ion

Commiss ion

A m o u n tRs. 13,760

(Rs. 14,000)R s . 650

(Rs. 500)R s . 650

(Rs. 500)f. Basic Earning Per Share (EPS) as per AS -20

E P S (before de fe r red tax)E P S (after de f e r red tax)

2009-1011.0810.27

2008-091 1 . 2 410.81

Th e Company is into th e bus iness of Gran i te Tiles an d Slabs on wh ich company have same deg ree o f r isk and r e t u r n . Theirp roduc t i on process is also similar. Further the company's r e ve n ue from domest ic marke t is negligible. Th us th e Companydoe s not have more than one repo r tab le segm en t in line with t he Acco un t i ng Standard 17 on "Segmental Report ing"i ssued by the Inst i tute of Char t e red Accou n t an ts o f India.There are no Smal l Scale Under tak ings to wh ich Company owes, for more than thirty days and e xc e e d in g Rupees O ne Lac.Di recto r 's Remunerat ion :

(Rs. in "000 . )

I SalaryII Rent Free A c c o m m . /HRAIII Commiss ion

2009-105,8201,4407,800

2008-095 ,28 01 , 3 2 08,400

29

8/6/2019 4719-10

32/36

Aro gran i te i n dus t r i e s ltd.

Director 's Travel ing ( R s . in "000.)2009-10 2008-09

I Local 12 1 602Foreign 2,429 5 , 0 1 4

Additional I n fo rma t i on p u r s u a n t to the prov is ions of paragraphs, 3, 4C and 4D of par t II Schedu le of the Companies Act ,1 9 5 6 .I. Licensed & Insta l led Capacity and Ac t u a l P rodu c t ion :

Unitlasso f goods

Licensed Capaci ty( P e r a n n u m )

Installed Capacity( P e r a n n u m )

Product ion

2010 2009 2010 2009 2010 2009UNIT-IGranite TilesUNIT -2Grani te Slabs

Sq.Mt.

Sq.Mt

1,80,000 1,80,000 1,80,000 1,80,000 46,953 1,07,1213,90,000 3,90,000 3,90,000 3,90,000 3,08,128 3,07,203

UNIT-2Tile Plant S q .M t 3,60,000 3,60,000 3,60,000 3,60,000 2,43,486 1,75,471

( T h e Instal led Capaci ty has been cer t i f i ed by a D i recto r o f the Company on wh ich the Aud i to rs have placed rel iancewithout ver i f icat ion).II. Part iculars in respect of sales :

Class o f Goods (Quantity in Sq.M.) ( R s . in "000.)Year ended Year e n d e d

_________ _ ___ 31.03.2010_____31.03.2009UNIT-I -Tile Plant _ ________79,843______1,32,184UNIT-II- Slab Plan t ______3,04,784______2,76,105UNIT-II -Tile Plant 2,21,504______1,42,945

Details of F in ished Goods :I. Detai ls of Opening Stock :

Class of G o o d s (Quantity in Sq.M.)Year ended Year e n d e d

_______ _ 31.03.2010_____31.03.2009UNIT-I -Tile Plant 42,296 __ 67,359UNIT-II -Slab Plant 1,16,961 85,863UNIT-II -Tile Plant 43,177________10,651Details of Closing Stock :

Class of G o o d s (Quantity in Sq.M.)Year ended Year ended______ _ 31.03.2010_____31.03.2009

UNIT-I - Tile Plant 9,406 42,296UNIT- I I -S lab Plan t 1,20,305 1,16,961UNIT-II -Tile Plant 65,159 ____ 43,177

m . Details of Raw mate r ia ls consumed during th e year :UNIT- I - TILE PLANT ______(Quantity in CBM)___ 31.03.2010 31.03.2009

Rough BlocksInd igenous 938.001 1 , 6 3 6 . 2 2 8Impo r ted Nil NilStores, Spares, Consumables & PackingImpor tedI nd i genou s

Year ended31.03.2010

Year ended3 1 . 0 3 . 2 0 0 9

36,689 76,3789,22,196 8,17,0283,61,037 2,77,560

( R s . in "000.)Year ended31.03.2010

Year ended3 1 . 0 3 . 2 0 0 939,420 62,120

1,98,299 1,38,57942,401 8,347

( R s . in "000.)Year ended31.03.2010 Year ended3 1 . 0 3 . 2 0 0 9

7,525 39,4202,05,202 1,98,29957,546 42,401

( R s . in "000.)31.03.2010 31.03.2009

19,009 35,657Nil Nil

7,409 34,9448,572

7,409 25,37230

8/6/2019 4719-10

33/36

8/6/2019 4719-10

34/36

Aro granite industr ies ltd.

Annexure - IREFERRED TO IN P A RA G RA P H 4 TO THE ACCOUNTS IN SCHEDULE 15 AND FORMINGPART OF T HE BA LA NC E SHEETBA LA NC E SHEET EX TRAC T AND COMPANY'S GENERAL BUSINEES PROFILE

Registration DetailsRegist rat ion N o . 55-31510Balance Sheet Date

State Code3 1 0 3

DATE MONTHCapital Raised during the year (amount in Rs. Thousand)

Public IssueNILBonus IssueNIL

5520 1 0YEAR

Right IssueNILPrivate Placement

NILPosit ion of Mobilisation and Deve lopmen t of Funds (Amount i n Rs. Thousand)S ou r ce of Funds

Total Assets1,701,405

Paid up Capital103,607

Secured Loans474,290

Net Fixed Assets679,115

Net Cur ren t Assets840,435

A c c u m u l a t e d LossN ILIV Per formance of Company (Amount in Rs. Thousand)

Turnover1,319,922

Prof t /Loss be fo re Ta x138,463Earn ing Per Share

11.08V Gener ic name of the Three Principal Produc t /Se rv ices of the Company

(A s per mone ta r y te rms)ITC code No.Product Descr ip t ion

Total Liabilities1,701,405

Reserves & Surp lus870,159

Unsecured LoansNIL

Investments187

Misc. Expendi tu reNIL

Total Expenditure1,188,685

Prof i t /Loss after Ta x106,397

Div idend Rate10.00%

680233 -G R A N ITE TILES & SLABS

8/6/2019 4719-10

35/36

Aro granite industries ltd. Attendance slipRegd. Of f i ce : S-16, Second Floor, Green Park Extens ion, New Delhi-110016 (India)

NAME: FOLIO NO/CLIENT IDADDRES SI cert i fy that I am a reg is te red s h a r e h o l d e r / p r o x y for the reg is te red sha reholde r of the Com pany .I h e re b y r e c o r d m y p r esence at the Twe n ty S econd Annual G e n e r a l Meeting of the Company at Lakshmipat SinghaniaA u d i t o r i u m , PH D Cham ber o f C o m m e r c e and Indust ry , PH D Hous e , 4/2 , Sir i Institutinoal Are a , A u g u s t Krant i Marg, N ew D e l h i110016 on Thu rsday , the 29th July, 2010 at 10.30 A.M.

M e m b e r ' s / P r o x y ' s name in Block Letters M e m b e r ' s / P r o x y ' s S ig n a tu reNote:1. Please sign this attendance slip and hand it over at the Attendance Verification Counter at the entrance of the meeting

hall. VERIFICATION COUNTERS W I L L BE CLOSED AT 10.20 A.M.SHARR2. N O GIFTS SHALL B E GIVEN AT THE MEETING. REFRESHMENTS W I L L B E GIVEN TO THOSE M E M B E R S W H O A R E

PE RS O N ALLY PRESENT A N D P R O X Y HOLDERS.3. TH IS A TTE N D A N C E SLIP IS VALID ONLY IN CASE SHARES ARE HELD O N T H E DATE O F MEETING4. No br ief case, transistors, bag, tiffin box, camera , food packets , bott les are allowed inside th e auditorium. Smoking,dr inking and eating is strictly prohibited inside th e auditorium.

PROXY FORMAro granite industries ltd.

Regd. Of f i ce : S-16, Second Floor, Green Park Extension, New Delhi-110016 (India)I/We_________________________________ of______________________in the d is t r i c t of__________________being a m e m b e r / m e m b e r s of Aro granite indus t r ies ltd. h e re b y appoint_______________________in the district of_____________________________or failing him_________________________in the d is t r ic t of_________________________as my /o u rp roxy to attend and vote f o r me / us on my/our behal f at the Twenty Second A n n u a l Ge n e ra l Meeting of the Com pany tobe held on Thursday, the 29th July 2010 at 10.30 A.M. and any adjournment thereof.As witness my/our hand(s ) this___day o f _ _ _ _ _ 2 0 1 0 Signatu re by the said____________N o t e :1 The p roxy need N OT be a m em ber .2 . Th e proxy Form s igned across th e r e v e n u e s t am p shou l d reach th e Comp a n y ' s Regis te red O f f ice n o t less than48 h o u r s be f o re th e s c h e du le d t ime of meet ing .3. Please fill in full par t icu la rs .4. Company reserves the right to ask for identification of the proxy.5. Proxy canno t speak at the mee t i ng or vo te on a s h ow o f hands .

8/6/2019 4719-10

36/36

Aro granite industries ltd.(100% Export Oriented Unit)An ISO 9001:2008 Company

Q_Q.